report on programme manipulation - Independent Inquiry Committee

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INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS Figure: Jaya Sudhir record, Faek Ahmad Shareef fax to Jaya Sudhir and Noor Asia Mahmood (referred to as “Nonni”) (Dec. 24, 2000). SOMO levied a total of approximately $10,380,361 in surcharges on Mastek’s Phase IX contract and, between January 2001 and April 2002, approximately $9,803,960 was paid into SOMO’s account at Jordan National Bank through 31 separate payments. 328 Mr. Shareef stated that, after 328 Committee oil company and surcharge tables, contract no. M/09/18; Jordan National Bank record, SOMO account, credit advices (Jan. 10, 2001) (cash payment by “Faek Shareef” in the amount of $340,000), (Jan. 14, 2001) (cash payment by “Shareef” in the amount of $370,000), (Feb. 6, 2001) (cash payment by “Shareef” in the amount of $300,000), (Feb. 7, 2001) (cash payment by “Shareef” in the amount of $390,000), (Feb. 13, 2001) (wire transfer by “Voeharm Holding Ltd” in the amount of $194,290.42), (Mar. 27, 2001) (cash payment by “Shareef” in the amount of $500,000), (Mar. 28, 2001) (cash payment by “Shareef” in the amount of $300,000), (Mar. 29, 2001) (cash payment by “Shareef” in the amount of $200,000), (Apr. 15, 2001) (cash payment by “Shareef” in the amount of $450,000), (Apr. 17, 2001) (cash payment by “Shareef” in the amount of $350,000), (Apr. 23, 2001) (cash payment by “Ahmed Younis” in the amount of $80,000), (Apr. 23, 2001) (cash payment by “Ahmed Younis” in the amount of $120,000), (Apr. 23, 2001) (cash payment by “Ahmed Younis” in the amount of $100,000), (Apr. 30, 2001) (wire transfer by “Keppel Oil” in the amount of €499,960.22), (May 1, 2001) (cash payment by “Abu-Faras” in the amount of $30,000), (May 2, 2001) (cash payment by “Shareef” in the REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 164 OF 623
INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS the first lift in December 2000, he was under constant pressure from the Iraqis to pay the surcharges. Between January and April 2001, Mr. Shareef paid approximately $3.2 million in cash into SOMO’s account at Jordan National Bank. Mr. Shareef received the money to pay these surcharges from Mr. Sudhir, who either would deliver the money to Mr. Shareef in cash or wire transfer it to one of Mr. Shareef’s accounts in Jordan. According to Mr. Shareef, it was his understanding that Vitol would pay Mastek sufficiently high premiums to cover payment of the surcharges. In a fax sent on February 26, 2001 from Iraq, Mr. Shareef wrote to Ms. Mahmood and Mr. Sudhir that “we must clear SOMO’s A/C as soon as possible – get the money from Vitol fast.” Mr. Shareef was referring to the practice of paying outstanding surcharges to SOMO within 30 days of a previous lifting so that future oil liftings were not delayed. With respect to the first surcharge payment on the Mastek contract in Phase IX, Mr. Sudhir confirmed that Vitol paid money as a commission to Mastek, and Mastek used the money to pay the surcharge owed on the contract. 329 According to Mr. Shareef, beginning in April 2001, the money to pay the surcharges was not consistently forthcoming from Mr. Sudhir, and he began to worry about his safety because Iraqi officials were harassing him to pay outstanding surcharges. Mr. Shareef wrote a letter dated April 17, 2001 to SOMO, requesting that it prohibit oil lifts scheduled for April and May 2001 under the Mastek contract until “all payments have taken place.” Bank records show that, shortly thereafter, surcharge payments resumed through Keppel Oil. Keppel Oil was a “shelf-company” that Mr. Sudhir formed to avoid currency restrictions imposed in Malaysia. The company was used to transfer €2.3 million to a SOMO account for the payment of surcharges between April and July 2001. 330 amount of $20,000), (May 8, 2001) (cash payment by “Abu-Faras” in the amount of $40,000), (May 8, 2001) (cash payment by “Abu-Faras” in the amount of $50,000), (May 8, 2001) (cash payment by “Abu- Faras” in the amount of $50,000), (May 14, 2001) (wire transfer by “Keppel Oil” in the amount of €199,950.22), (May 14, 2001) (showing cash payment by “Abu-Faras” in the amount of $20,000), (May 17, 2001) (cash payment by “Abu-Faras” in the amount of $40,000), (May 17, 2001) (wire transfer by “Keppel Oil” in the amount of €299,960.22), (July 9, 2001) (wire transfer by “Keppel Oil” in the amount of €269,948.50), (July 9, 2001) (wire transfer by “Keppel Oil” in the amount of €299,948.50), (July 16, 2001) (wire transfer by “Keppel Oil” in the amount of €499,946.50), (July 18, 2001) (wire transfer by “Keppel Oil” in the amount of €279,946.50), (Aug. 2, 2001) (wire transfer by “Keppel Oil” in the amount of €199,946.50), (Aug. 6, 2001) (wire transfer by “Keppel Oil” in the amount of €1,999,859), (Aug. 29, 2001) (wire transfer by “Keppel Oil” in the amount of €499,946.50), (Apr. 1, 2002) (wire transfer by “Cosmos Capital Group” in the amount of €1,708,428.25) (each translated from Arabic). “Abu-Faras” is a reference to Mr. Shareef, and Ahmed Younis is an assistant to Mr. Shareef. Faek Ahmad Shareef interviews (Aug. 15-18, 2005). Voeharm Holding Ltd. is a company used by Mr. Sudhir. Jaya Sudhir interview (Aug. 19, 2005). 329 Faek Ahmad Shareef interviews (Aug. 15-18, 2005); Jaya Sudhir record, Faek Ahmad Shareef fax to Noor Asiah Mahmood and Jaya Sudhir (Feb. 26, 2001); Jaya Sudhir interview (Aug. 19, 2005). 330 SOMO letter to Amer Rashid (Apr. 24, 2001) (indicating that “Faek Shareef had sent them a letter asking them to stop the remaining lifts scheduled for April and May until all payments have taken place”) (translated from Arabic); Jordan National Bank record, SOMO account, credit advices (Apr. 30, 2001) (wire transfer by “Keppel Oil” in the amount of €499,960.22), (May 14, 2001) (wire transfer by “Keppel REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 165 OF 623
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report on programme manipulation - Independent Inquiry Committee

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